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NBFCs Forge OEM Partnerships to Drive MSME Lending in High-Growth Sectors

  //business-finance.news-articles.net/content/202 .. o-drive-msme-lending-in-high-growth-sectors.html
  Published in Business and Finance on Tuesday, December 23rd 2025 at 8:15 GMT by Goodreturns

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NBFCs Bolstering MSME Lending Through Strategic OEM Partnerships in High‑Growth Sectors

The recent article on GoodReturns.in outlines a notable shift in the landscape of non‑banking finance (NBFC) activity in India. It highlights how a group of leading NBFCs—primarily those with a long‑standing focus on micro, small, and medium‑enterprise (MSME) financing—are now tapping into new growth corridors by forging tie‑ups with major Original Equipment Manufacturers (OEMs). These alliances, the piece argues, not only deepen the NBFCs’ product offering but also create a more resilient credit portfolio for an economy that has been re‑energised by the surge in high‑growth sectors such as electric mobility, renewable energy, and agri‑tech.

A Strategic Pivot: From Classic MSME Lending to OEM‑Enabled Credit

Historically, NBFCs have built their fortunes on supplying working capital, term loans, and asset‑backed financing to MSMEs across a broad spectrum of industries. The article points out that, while this business model has delivered steady growth, it has also exposed NBFCs to concentration risk, particularly when borrowers are concentrated in a single industry or region. In response, the NBFCs highlighted in the report are diversifying by partnering with OEMs whose product lines drive demand in high‑growth sectors.

By aligning with OEMs, NBFCs can now offer end‑to‑end financing packages that bundle loans with equipment purchases, maintenance contracts, and even after‑sales services. This approach not only enhances the perceived value for borrowers but also gives the NBFCs access to OEMs’ proprietary data—such as sales pipelines, customer creditworthiness, and usage patterns—that can improve risk assessment and reduce default rates.

The OEMs That Are Shaping the Narrative

The article features a handful of OEM names that have announced joint initiatives with NBFC partners. These include:

• Tata Motors’ automotive financing arm – in partnership with a prominent NBFC, they are targeting micro‑enterprises that lease or purchase electric vehicle (EV) components.
• Adani Energy’s renewable equipment division – has signed an agreement to channel financing to MSMEs involved in solar panel installation and maintenance.
• Amul’s dairy equipment suppliers – working with a financial institution to provide working capital for small dairy farms that adopt modern milking technology.

Each OEM brings a distinct value proposition. For instance, the EV partnership is underpinned by the rapid expansion of the electric mobility ecosystem, which is projected to grow at a CAGR of more than 20% over the next decade. Meanwhile, renewable energy ties tap into the national push for clean energy infrastructure, a sector that has seen unprecedented investment from both public and private stakeholders.

Sector‑Specific Benefits and Risk Mitigation

A key theme of the article is how OEM tie‑ups create a “win‑win” dynamic. From the NBFC’s perspective, the risk is mitigated by the fact that the borrower’s repayment capacity is tied to the operational success of the OEM’s product. If a dairy farm adopts a new milking machine, its productivity—and consequently its cash flow—improves, which in turn translates to a higher probability of timely loan repayment. For the OEM, the partnership extends its reach into MSME segments that might otherwise be out of scope for its sales teams, while also creating new revenue streams through financing fees and service contracts.

The article also delves into regulatory nuances. The Reserve Bank of India’s (RBI) guidelines on “alternative data” allow NBFCs to incorporate non‑traditional data points—such as utility bill payment history, telecom usage, and OEM performance metrics—into credit scoring models. By leveraging OEM‑derived data, NBFCs can achieve more granular risk profiling, a development that the article highlights as a potential catalyst for deeper penetration into underserved MSME markets.

Quantitative Highlights

While the article is largely qualitative, it does provide some quantitative context that underscores the significance of these OEM partnerships:

• Credit portfolio expansion – NBFCs that have entered into OEM agreements have reported a 12% YoY increase in their MSME loan book, with the majority of growth attributed to the new high‑growth sectors.
• Default rates – Preliminary data suggests that the default rate on OEM‑backed loans has been lower than the NBFC average, hovering around 2.8% versus 4.5% for conventional MSME loans.
• Revenue diversification – The introduction of equipment‑linked financing has contributed an additional 3–4% to the NBFCs’ revenue mix, primarily through service and maintenance fee streams.

Challenges and Future Outlook

Despite the optimistic tone, the article does not shy away from the challenges that lie ahead. Key among them is the need for robust governance frameworks to manage the intersection of financial services and OEM operations. The risk of “conflict of interest” arises if an OEM exerts undue influence over loan terms or if the NBFC becomes overly reliant on a single OEM partner. The article advises that successful partnerships will hinge on clear contractual terms, independent risk assessment protocols, and ongoing monitoring of borrower performance.

Looking forward, the article anticipates that this trend will accelerate as the Indian economy continues to prioritize infrastructure, technology, and sustainability. It predicts that NBFCs will increasingly adopt “product‑centric” financing models, wherein the loan is designed around a specific OEM offering. Such models could also unlock new financing vehicles—like subscription‑based leasing or revenue‑share agreements—that align payment obligations with the actual cash flow generated by the equipment.

Bottom Line

In sum, the GoodReturns.in article paints a compelling picture of how NBFCs are reinventing MSME lending through strategic OEM tie‑ups. By embedding financing into the lifecycle of high‑growth sector products, these financial institutions are not only enhancing their own risk profiles but also providing a much‑needed bridge between technology providers and the MSME community. As India’s manufacturing, energy, and agricultural landscapes evolve, the synergy between NBFCs and OEMs will likely become a cornerstone of inclusive, sustainable economic growth.